Insurance in South Africa

With a higher crime rate than most countries, you can expect to pay more for insurance in South Africa, whether it be life, pet, car or travel insurance.

Upon first glance, it can be difficult to understand the differences between policies in some areas. Especially those with huge numbers of providers, such as health insurance and travel insurance. Here, we give an overview of each type of insurance. This guide includes sections on:

Overview of insurance in South Africa

South Africa has around 170 active insurance companies, however, not many forms of insurance in the country are mandatory. Consequently, many South African residents have little or no insurance.

Expat residents are more likely to take out different forms of insurance in South Africa. This includes car insurance, health insurance, and life insurance.

The South African insurance sector is regulated by the Prudential Authority, which is an arm of the South African Reserve Bank. The South African Insurance Association (SAIA) is the main representative body of non-life insurance companies, with 58 members.

You can find out more details about insurance companies in the Expatica business directory for South Africa.

What insurance in South Africa is legally required?

Home insurance

Home insurance isn’t compulsory for everyone living in South Africa. However, if you take out a mortgage in South Africa, your mortgage lender will usually insist on you taking out buildings insurance when buying a home.

When you buy a home in South Africa, it makes sense to shop around for buildings insurance. This will cover the costs of rebuilding your property should the worst happen. It also covers any permanent fittings inside your house.

Social insurance

If you live and work in South Africa, you will pay regular contributions to the South African Social Security Agency (SASSA). This covers areas including:

• old-age pensions
• disability benefits
• child support
• car dependency grant
• social relief in times of distress
• unemployment benefit

Read our comprehensive guide to social security in South Africa for more information.

Optional forms of insurance in South Africa

Car insurance

South Africa has a high accident and car theft rate. Because of this, it’s important to take out insurance to protect yourself should an emergency happen. However, car insurance is not compulsory so it will be up to you to make your own insurance arrangements.

You can usually arrange car insurance over the phone online. However, companies will sometimes follow this up by visiting you at your home. This is to ensure you actually own the car and aren’t signing up for a false agreement.

As with other countries, a variety of things affect your car insurance quote. This includes the make of the car, your age, the area you’re living in, your job, and how often you’re using it.

Some companies will offer a discount on your monthly premium if you have a tracking system installed in your car. If you’re buying a new car you might be given the option to have one installed. You may need to test tracking systems on second-hand cars before sorting out your insurance.

There are three types of car insurance in South Africa:

• Third-party liability insurance – if you cause an accident and have to compensate another party, your insurer will cover the costs.
• Third-party liability, theft, and fire insurance – also covers the replacement of your vehicle if it’s stolen or damaged by fire.
• Comprehensive insurance – also covers repairs regardless of who is at fault, and often includes roadside assistance.

Health insurance

While there is a state healthcare system in South Africa, it struggles to cope with demand due to lack of funding. Because of this, most expats tend to take out a private healthcare plan either with a provider in their own country or one in South Africa.

When searching for a health insurance provider in South Africa, you’re likely to encounter a bewildering number of options. This can include everything from limited schemes for younger people to comprehensive cover on offer.

You can either choose a private provider once in South Africa, or see if a company in your existing country will offer a special expat policy. If you have one, it’s also sometimes possible to extend your current South African health insurance plan to cover you while in South Africa.

Expat-friendly international health insurance companies operating in South Africa include:

• Allianz Care
• Cigna Global

See our guide to health insurance in South Africa for more detailed information.

Dental insurance

The most common way to cover yourself for dental care in South Africa is to take out an insurance plan where you pay a monthly premium to cover your dental costs.

Low earners and the elderly can often get basic dental care through the state.

Health insurance policies don’t usually include dental insurance, although it is sometimes possible to add it on for an extra charge.

Generally, you pay dental insurance on a monthly basis through plans offered directly from healthcare providers. These usually work on the basis of discounted fees. For example, you may get 80% off treatment up to a certain sum, but you’ll often still have to pay any additional costs yourself.

See our guide to dental care in South Africa for more information.

Contents insurance

Contents insurance is optional, but with high crime rates in some areas, it can be a worthwhile investment.

While it’s not legally required, it’s also sensible to take out contents insurance. This will cover your belongings against theft or damage. Premiums vary significantly depending on the value of your belongings and where you’re living.

Life insurance

You’ll usually need to take out your own life insurance scheme, which will provide lump-sum coverage in the event of your death (and in some cases serious injury, too).

Life insurance in South Africa works similarly to other countries. You usually pay a monthly premium to be guaranteed a lump-sum in the event of death (or in some cases serious injury).

If you’ve got life insurance already in your own country, look into whether you’ll be covered when you move to South Africa. Many international companies provide special expat cover. The usefulness of this depends on the cost and whether you’re intending on remaining in South Africa for the foreseeable future.

Unemployment insurance

If you live and work in South Africa, your social security payments will entitle you to state-provided unemployment benefits. However, payment levels are not high.

Consequently, many expats take out private unemployment insurance to cover the needs of themselves and their family during times of being out of work.

Pet insurance

Veterinary bills can be high in South Africa,  so many pet owners opt to take out private insurance to cover major medical expenses.

Domestic animal insurance in South Africa usually covers accidental injuries, illnesses, and operations. In some cases, it covers emergency housing such as kennels or catteries. Some policies even include coverage for advertising if your pet goes missing.

Annual check-ups and vaccinations aren’t usually covered by standard plans unless you pay extra. In addition to this, pre-existing conditions, preventable diseases, hereditary illnesses, pregnancy, and behavioral problems also don’t usually make the cut on standard insurance schemes.

Travel insurance in South Africa

Travel insurance isn’t usually included in healthcare premiums. Consequently, you’ll need to arrange your own insurance plans on a single, multi-trip, or annual basis.

There are dozens of travel insurance companies in South Africa. Because of this, it pays to shop around before taking the plunge. Policies are usually very flexible and can be compared online.

As with elsewhere, travel insurance premiums are affected by several issues. These can include your reason for traveling, your age, and any pre-existing conditions.

For example, some companies will charge extra if you’re taking part in any extreme sports or manual labor while you’re away. Exclusions can also apply if you’re traveling to less-developed areas in Africa, or if you’re elderly.

It’s possible to get a policy to cover your entire family. High-end policies will cover you for up to £10 million of medical expenses, while even standard options should cover flight cancellations and loss of luggage.

Commercial insurance in South Africa

If you run a business in South Africa or work freelance self-employed, you can insure the various aspects of your business or enterprise with commercial insurance. This can include:

• Liability insurance – businesses interacting with the public will need public liability insurance to cover themselves against third party claims. You can also purchase employers’ liability to cover work injury claims from staff, and product liability for incidents relating to products sold.
• Property insurance – this can include cover for building damage as well as damage, theft, or loss relating to equipment, stock, or electronic data, depending on the level of coverage you purchase.
• Business interruption insurance – if you undergo a period where you cannot operate for any reason, this insurance covers financial losses and work-related expenses, including staff salaries.

Useful resources

• Compare Guru – financial comparison site where you can check different forms of insurance including car insurance, life insurance, and home insurance.